Lifeline for IT trader as creditors agree deal
Dubai Computer Traders Group arranges deal to allow trader to continue to operate while paying off debts
The owner of a Dubai computer chain feared to have fled the market owing close to $1m has agreed a payment plan with his suppliers that has allowed him to continue trading.
Manish Hirani, boss of Febis Computers, Dallas Computer, Maxima and Ample Computer, faced more than 50 creditors at a specially-arranged meeting earlier this month to explore how the trade debts could be repaid without having to pull the plug on the business, which has been operating for the past eight years.
Question marks over the company’s financial health first arose in the channel at the beginning of this year, leading to speculation that Hirani had closed the four showrooms and disappeared from the market.
He insists that was never the case and that although he left the country to go abroad for a short period his intention was always to find a way of refunding suppliers.
“I have read the stories of people running away and while I knew it was going to be very difficult I decided to stay and fight,” explained Hirani. “I don’t know what the future holds for me, but I can tell you that my intention is very clear and I intend to pay people back. Companies have been very supportive of me and I have said that the only thing I need from people is time, nothing else.”
Hirani is understood to owe the market around AED2.8m ($760,000). The debts are spread between around 40 suppliers, with no single amount totalling more than AED300,000 ($80,000).
Following the gathering with suppliers at Dubai’s Wi-Fi Computer Zone, Hirani has pledged to make monthly payments to the Dubai Computer Traders Group and settle his debts over the next one to two years. The DCTG will be responsible for distributing the payments among creditors, the majority of which are sub-distributors and local vendors.
Although the plan is understood to have faced some opposition, suppliers have accepted that this scenario should result in them retrieving some or all of what they are owed.
Hirani blamed the company’s troubles on changes in market conditions that caused the collapse of several long-term customers earlier this year. He also said currency fluctuations had led to losses on re-export sales to the African markets.
“We have been doing business for the last eight years without any problems, but in this recession everybody is linked to one another — one company becomes stuck because of somebody else and then somebody else gets stuck because of them, and so on. Many suppliers run away and don’t come back and nobody can do anything about it, but I came here to fight and I intend to pay. I have received a positive response from the computer market and everybody has supported me although it will take another year or two to recover.”
Although Dallas, Febis and the other group companies now face difficulty in securing credit from the market, Hirani believes the confidence of suppliers will return once they see that the payment plan is working. He also said some key corporate clients had promised to increase the level of business they do with the company in order to help it grow its operations again.
The agreement between Hirani and suppliers is believed to be the first of its kind in a Dubai market that has suffered its fair share of ‘runaway’ cases in recent years.
One Computer Street trader who was present at the meeting said it was encouraging to see suppliers reach a compromise that allowed the company to stay on its feet, but warned that it does not mean other traders which encounter difficulties will be bailed out by the market.
“We are just crossing our fingers that everything will be successful and nobody should take any untoward action in between because if the plan is kept to then everybody should get their funds back,” said the source. “This doesn’t mean that everybody that falls into trouble is going to be supported, but hopefully it is something that will encourage people not to run away.”